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China announced over the weekend it would raise the defense budget 7%, a bump that the official media describe as modest compared to Western European and U.S. military spending. This year’s increase fails the 7.6% growth of 2016 and ranks as the lowest in a decade. The point is to defend Chinese sovereignty, rights and interests, defense insiders told Xinhua News Agency.

“China’s military is far larger than any other country in the region,” says Bonnie Glaser, senior adviser for Asia at the Center for Strategic and International Studies, a think tank in Washington. "Even if the budget increases at 7%, slightly less than last year, it is much higher than any other government in the region. Almost all of China's neighbors are uneasy about China's growing military power, especially those that have territorial disputes, either over land or water.”

A military delegate is mobbed by the media as he arrives at the Great Hall of the People ahead of... [+] the opening of the National People's Congress in Beijing on March 5, 2017. (NICOLAS ASFOURI/AFP/Getty Images)

These five countries should worry most about the increase over last year’s $138 billion Chinese defense budget:

1. Japan: The country with East Asia’s most powerful military after China may need to pace the budget increase so it can monitor Chinese vessels and planes in the sea between them. China still resents Japan for its World War II-era invasion. Now they dispute sovereignty over the eight uninhabited Senkaku Islands in the shared East China Sea. Japan controls the islets now. China sends ships and plans that way to remind Japan it’s not the only claimant. Last week China flew 13 aircraft, including fighters and bombers, near Okinawa, prompting Japan to scramble its own fighters. That was just the latest such exchange. If China expands its navy and air force for more operations in the sea, Japan may need to boost its own.

2. Vietnam: China and Vietnam sort of reached frenemy status over the past half year, pausing deep historical distrust over land and maritime sovereignty to focus on economic matters. But the country that fought a border war in the 1970s and has clashed with China at sea multiple times since then can’t assume business deals will settle old scores. Vietnam maintains the ninth strongest armed forces in Asia today in part to hold its South China Sea maritime claims against any moves by China. It’s shopping around aggressively for new arms, says Carl Thayer, Vietnam scholar and emeritus professor of politics at The University of New South Wales in Australia. To name just two examples, it finished buying six Russian-made submarines in September, the same month Japan offered Vietnam a soft loan for six new coast guard patrol boats.

3. The Philippines: The Philippines started talking with China in October when President Rodrigo Duterte visited Beijing. There’s talk of cooperation in a tract of the South China Sea that both claim. The Philippines previously felt violated enough to take China to a world arbitration court, and it won a ruling in July. Now Duterte, after a run of anti-American bluster, shows signs of getting along with new U.S. President Donald Trump and sustaining military cooperation enshrined by hard-set deals since 1951. If Duterte aggressively steps up protection of the maritime claim contested by China, he could turn to the powerful American military aid that his predecessors have enjoyed. But his country -- and Washington -- would need more of it to counter stronger Chinese forces or to be taken seriously if Manila and Beijing meet again for talks.

4. India. China and India, the second biggest Asian country by population, contest two pieces of land along their rugged land border. One is in the western Chinese region of Xinjiang, and the other Arunachal Pradesh, is under Indian control. Plenty of Indian troops are stationed near both, part of a military that ranks fourth strongest in the world. If China spends part of its 7% increase on border defense, India would need to follow up at its end to hold the one region and make a case for the other either on the ground or in bargaining rooms.

5. Taiwan. Taiwan is used to being the target of the People’s Liberation Army. China is believed to be aiming missiles at the island that’s about 160 km (99 miles) away and the two have at least half expected to fight since the 1940s. That’s when the Nationalists lost a civil war to China’s Communists and rebased in Taiwan. Taiwan has been self-ruled since then but China says the two fall under its own flag. China never renounced the use of military force to make the two sides unify. In December and January China sailed its aircraft carrier around Taiwan, naturally putting the Taiwan defense ministry on high alert. If the Chinese budget increase swings its way again, Taiwan might feel more pressure to boost its own military. Taiwan needs to keep strong as well in case the two sides sit down for talks again as they did from 2008 to 2015, a Western diplomat once said.

China still might be serious about peace or at least not challenging anyone else with the budget increase. Part of the bigger budget might help 300,000 troops transition from army to civilian life, if let go as planned in 2015, and raise living standards of those who remain in the service, says William Sharp, Honolulu-based author of Random Views of Asia from the Mid-Pacific. “Whether a country should be worried or not depends in part on how China plans to spend the 7% increase,” he says.

As a news reporter I have covered some of everything since 1988, from my alma mater U.C. Berkeley to the Great Hall of the People in Beijing where I followed Communist

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As a news reporter I have covered some of everything since 1988, from my alma mater U.C. Berkeley to the Great Hall of the People in Beijing where I followed Communist officials for the Japanese news agency Kyodo. Stationed in Taipei since 2006, I track Taiwanese companies and local economic trends that resonate offshore. At Reuters through 2010, I looked intensely at the island’s awkward relations with China. More recently, I’ve studied high-tech trends in greater China and expanded my overall news coverage to surrounding Asia.